This market brief is an overview of the week ahead and some of the events we see as being important to the markets.
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INDICES AUSTRALASIA ASX – 6177 ( +65 or +1.06% ) The ASX managed to find support last week and the question now is can this market rally from here? We will be discussing this market extensively in the MEMBER PORTAL this week. VOLATILITY ALERTS: Tue 11:30 – Monetary Policy Minutes Tue 11:30 – House Price Index (quarterly) For a continued move higher we must now see the ASX hold above 6140 followed by a retest of 6206. Should this occur we will look for a move into 6276, and if momentum to the upside is very strong we cannot rule out a move to 6345 and 6374. If the ASX cannot hold above 6140, we will look for a move back down to 6085 before a pause. A strong break and close below this level however could see the ASX retest 6040, and if downside momentum is very strong we could see a move down to 6002.
EUROPE DAX – 12122 ( +181 or +1.52% ) Like the ASX, the DAX also managed to find some buyers and is now testing a very key level at 12114. VOLATILITY ALERTS: Fri 01:15 – German Buba President Weidmann Speaks Fri 17:30 – German Flash Manufacturing PMI Fri 17:30 – German Flash Services PMI For a continued move to the upside we must now see the DAX hold above 12198 followed by a move into 12384. A break of this level could then result into a quick move into 12566; and if we can break this level we cannot rule out a test of 12640. If the DAX fails to close above 12198, we expect to see a move back down into 12114 before a pause. A break below this level however means we may see very strong into 12000, followed by a move to 11800 before another pause. If the downside momentum is strong however, watch out for a fast move into 11640.
US SP500 – 2904 ( +33 or +1.15% ) The US is still the strong equities market around the globe and with the S&P falling just shy of new all-time highs, can we see continued strength in this market? We will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Mon 22:30 – Empire State Manufacturing Index Wed 22:30 – Building Permits Wed 22:30 – Housing Starts Mon 22:30 – Philly Fed Manufacturing Index For a move higher we would like to see the S&P hold above 2902. Should this occur we expect a quick retest of 2908; and a break above this level could set the stage for a bigger move into 2922 and 2930. If momentum to the upside is very strong we cannot rule out a move to 2957 If we cannot hold above 2902 , we will look for a move back down to 2870. A break below this level may result in another quick move down into 2840; and if momentum to the downside is very strong we cannot rule out a move into 2808.
FOREX AUD/USD – 0.7153 ( +50 or +0.7% ) Our comments last week were “the Aussie Dollar continues to remain bearish”, and that view remains the same. We will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERTS: Tue 11:30 – Monetary Policy Minutes Tue 11:30 – House Price Index (quarterly) For a move higher we would like to see the AUD close strongly and break above 0.7169 followed by a move to 0.7229. A strong break and close above this level could see a quick move to 0.7282 before a pause; and if momentum remains strong we will look for a move back up into 0.7364. If we cannot close above 0.7169, we will look for some stability at the key 0.7112 level. A failure here however may result in a move back down into 0.7070 before another potential pause. Any subsequent breaks of this level however may result in a very fast into and below 70c.
EUR/USD – 1.1622 ( +70 or +0.61% ) The Euro has come into key technical resistance as we saw sellers return to this market on Friday. VOLATILITY ALERTS: Mon 19:00 – Final CPI (annual) Tue 17:15 – ECB President Draghi Speaks Wed 23:00 – ECB President Draghi Speaks Fri 18:00 – Euro Area Flash Manufacturing PMI Fri 18:00 – Euro Area Flash Services PMI For a sustained move higher we would like to see the EURO close and hold above 1.1613 this week. Should this occur we could see a strong move into 1.1738 before another pause. A strong break above 1.1738 could result in a fast move to 1.1822. If the EURO cannot hold above 1.1613, we could see a fast move down into 1.1496. A break below this could be followed by another quick move into 1.1453; and should momentum remain strong we cannot rule out a move to 1.1347.
GBP/USD – 1.3068 ( +153 or +1.18% ) Like the EURO, the Pound is also at a very important resistance area and this is a key week for this market with the 1.3161 level less than 100 points away. We will be discussing the importance of this level this week in the the LIVE CHAT ROOM . VOLATILITY ALERTS: Wed 18:30 – CPI (annual) Thu 18:30 – Retail Sales (monthly) For a continued move to the upside, we would like to see Cable remain above 1.3035, followed by a retest of 1.3111 and 1.3161 before a pause. Should this occur we will look for a move to 1.3191; and if momentum is very strong we could see a move into 1.3277 by the week’s end. On the downside, should we break and close strongly below 1.2868, there is every chance we see a move lower into 1.2720. Should this level break however we could see a fast move down into 1.2622; and if momentum is very strong we cannot rule out a move to 1.2510.
USD/JPY – 112.04 ( +98 or +0.88% ) The $/YEN has broken to the upside despite continued efforts from sellers to sell this market lower. NOTE: Monday is a public holiday in Japan (Respect for the Aged day) For a move to the upside we must now see this market hold above 111.73, followed by a strong move into 112.68. If momentum is very strong to the upside a move into 113.87 cannot be ruled out. If we cannot hold above 111.73, we will look for a quick retest of 111.09. A break below this level however may result in a fast move down to 109.94, and if the downside remains strong we could see a strong sell-off into 109.21.
COMMODITIES GOLD – 1193 ( -2 or -0.17% ) GOLD remained flat last week and as such our levels remain unchanged. For a move higher we would like to see this market close above 1206 on its way to 1222. Should this occur we will look for a retest of 1238. A close above this level may likely see a further move to the upside into 1247 before a pause. Should momentum remain very strong, we could see a fast move into 1260. If Gold cannot close above 1206, we could see another quick decline into 1187. Any subsequent breaks of this level may result in further downside into 1180, and if momentum to the downside remains very strong we cannot rule out a move into 1170.
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